Krispy Kreme Financial Analysis

1826 words - 8 pages

Professor Agbatutu
BUSN 5600
Webster University

History
In 1937 Vernon Rudolph bought a doughnut recipe from a New Orleans French chef and began selling Krispy Kreme doughnuts to local grocery stores in Winston Salem, N.C. People would pass by these stores smelling the delicious scent of Rudolph’s doughnuts and ask to buy hot doughnuts, so Rudolph cut a hole into the wall of his rented building and began selling the Original Krispy Kreme doughnuts to customers who walked by on the sidewalk (History, 2012).
By the 1950s Rudolph and Krispy Kreme were doing well with a few family owned chain stores but the business was not consistent. The doughnuts were ...view middle of the document...

As this company continues innovation they also preserve the original Krispy Kreme experience that Vernon Rudolph first envisioned.
Executive Summary and Products
The company’s mission statement is “to touch and enhance lives through the joy that is Krispy Kreme” (Krispy Kreme 2012). The Krispy Kreme vision says they want “to be the worldwide leader in sharing delicious tastes and creating joyful memories” (Krispy Kreme, 2012). Krispy Kreme also established values based on the founder of the company Vernon Rudolph which states:
‘We believe’...

-Consumers are our lifeblood, the center of the doughnut
-There is no substitute for quality in our service to consumers
-Impeccable presentation is critical wherever Krispy Kreme is sold
-We must produce a collaborative team effort that is unexcelled
-We must cast the best possible image in all that we do
-We must never settle for "second best;" we deliver on our commitments
-We must coach our team to ever-better results

Krispy Kreme offers three categories of products: doughnuts, coffee and beverages, iced drinks and Kool Kreme. Doughnuts consist of original glazed, varieties doughnuts, mini doughnuts, doughnut holes, and featured doughnuts. Coffee and beverages consist of coffee roasts, espresso drinks, and hot chocolate. Iced drinks and Kool Kreme consist of chillers, iced beverages, flavor syrups, doughnut sundaes, classic sundaes, arctic avalanche, cones, milkshakes, and toppings. Krispy Kreme is sure to provide you with a product to satisfy your sweet craving.
Board of Directors and Strategies
Charles Blixt served as Krispy Kreme’s General Counsel on an interim basis from September 2006-Apri 2007. Blixt served as Executive Vice President and General Counsel of Reynolds American Inc from 2004-2006. His experience provided him a solid understanding of Krispy Kreme’s business, values and culture (Krispy Kreme, 2012). Lynn Crump-Caine served as Chief Executive Officer (CEO) of OutsideIn Consulting, a consulting firm specializing in organizational performance and strategy development. Ms. Crump-Caine also served as Executive Vice President of Worldwide Operations of McDonald’s Corporation from 2001-2004. Her experience in the quick-serve industry from her time at McDonald’s allows her to bring much to the Krispy Kreme table (Krispy Kreme, 2012).
C. Stephen Lynn has served as the Chairman of the Board of BBAC, LLC since 2009. Mr. Lynn brings leadership, franchising, strategic planning, and business development skills to the Krispy Kreme board through his experience in quick-service and casual dining restaurant settings (Krispy Kreme, 2012). Robert S. McCoy, Jr. is currently the Chairman of Krispy Kreme’s Audit Committee. Mr. McCoy retired as Vice Chairman of Wachovia Corporation in 2003 and his qualifications as an “audit committee financial expert” under SEC guidelines proves to be an...

Other Papers Like Krispy Kreme Financial Analysis

1015 words - 5 pages
price of $39.02 per share. Because the financial markets were haunted by the terrorist attacks on September 11th and the aftermath of the Enron bankruptcy scandal, nervous investors turned to companies with straightforward business models, like Krispy Kreme.
However, in 2002, these investors were surprised by Krispy Kreme's sudden announcement that the company was abandoning an off-balance-sheet financing plan called a "synthetic lease" in favor

3525 words - 15 pages
indicated that things were not quite as good as they seemed. The firm’s stock price quickly plummeted from its peak and lost more than 80 percent of its value in only 16 months.
This case study focuses on the use of financial statement analysis, and other factors that an equity analyst would use to gauge the health of a firm, to help identify symptoms that demonstrate things where not as good as they seemed at Krispy Kreme. The report starts by

1607 words - 7 pages
]
-------------------------------------------------
Case Project #1: Krispy Kreme Doughnuts, Inc.
What can the historical income statements (case Exhibit 1) and balance sheets (case Exhibit 2) tell you about the financial health and condition of Krispy Kreme Doughnuts, Inc.?
The income statement and balance sheet provides an overview of the company’s expenditures, future debt constraints, and how the company has done in previous years allowing investors and other

921 words - 4 pages
shop, where doughnuts are made fresh on site. Even after introducing Macola, further automation became necessary when subsequent growth made it increasingly difficult to manage day-to-day operations. Krispy Kreme partnered with J.S. Walker & Co. to evaluate the company’s order, product delivery and inventory management life cycle. Analysis revealed that concentrating on process and supply chain communication would deliver the most significant

1906 words - 8 pages
traditional large stores in fewer areas which has allowed them to reach more customers and somewhat reduce costs, they are still facing a lot of store closures. Despite these financial improvements, the company is drawing in comparatively smaller revenues and still has higher costs than its competitors in the present market. Krispy Kreme needs to focus on cutting costs and expanding their customer base even further to bring in higher revenues. This can

1070 words - 5 pages
negative backlash, Krispy Kreme is in urgent need of restoring the faith of the financial health of the firm.
Initiate less aggressive accounting practices to avoid further inquiries about the companies financial operations. This alternative is expected to restore trust amongst investors and financial analysis. The advantage is that by restoring faith in the firm, demand for the stock will eventually increase therefore the stock price will increase

1279 words - 6 pages
future customers of the company. And thus the financial statements and the
choice of accounting policies may be seen as containing signals about their future
performances also.
5. What is the source of intrinsic investment value in this company? Does this source appear on
the financial statements?
Intrinsic value refers to the actual value of a company or stock determined through
fundamental analysis without reference to its market value. It is ordinarily calculated by
summing the future income generated by the asset, and discounting it to the present value.
No intrinsic investment appears on the financial statement of Krispy Kreme Doughnuts.

548 words - 3 pages
Suggested Questions for Case 7
1. What can the historical income statements (case Exhibit 1) and balance sheets (case Exhibit 2) tell you about the financial health and current condition of Krispy Kreme Doughnuts, Inc.?
* Looking at the financial statements for Krispy Kreme the firm’s financial health is not good, and the current condition is troubling.
* The large amount of growth of the company in the years 2003 and 2004

4683 words - 19 pages
HSBC?
2. Where is HSBC vulnerable? What should it watch out for?
3. What recommendations would you make to senior marketing executives going forward? What should they be sure to do with its marketing?
Case NO .4
MARKETING SPOTLIGHT- KRISPY KREME
Krispy Kreme makes 2.7 billion donuts a year. But it took more than fresh, hot donuts to

Related Essays

2477 words - 10 pages
company reported sales that averaged $2.82 million between the 276 store locations throughout the country. Krispy Kreme met with such success during this time period that they were even ranked number one in Restaurants and Institutions’ Choice in Chain’s category over Starbucks which was ranked at number two.
Though an image of a successful business has been painted of Krispy Kreme thus far, the company ran into financial turmoil in the year

2343 words - 10 pages
” (Thompson et al, 2004). Sales were at a peak during those openings. Gradually, without advertising to keep Krispy Kreme fresh and new in the public eye, sales declined.
Financial Analysis
On paper, Krispy Kreme seems to be a company in which there is no end in sight. When it comes to making a hefty profit based solely on the idea of selling hot, delicious doughnuts, Krispy Kreme is excellent. Since this case was written, Krispy Kreme’s net income